South Korean stocks fell to a three-month low Thursday as investors were wary of the Federal Reserve's further rate hikes and potential risks in China's real estate sector. The local currency fell against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) shed 5.79 points, or 0.23 percent, to close at 2,519.85, its fifth consecutive loss. It was the lowest level since May 18, when the KOSPI ended at 2,515.4.
Trading volume was moderate at 725.27 million shares worth 10.57 trillion won (US$7.87 billion), with losers outpacing gainers 646 to 238.
The index opened sharply lower, tracking overnight U.S. losses, and had fallen to below the 2,500 level before erasing some earlier losses on retail buying.
Institutions sold a net 97.83 billion won, while retail and foreign investors bought a net 85.11 billion won and 10 million won worth of shares, respectively.
"Investors are becoming risk-averse due to concerns about China's property sector and the broader economy. The weakening of the Korean currency also made domestic shares less attractive," said Kim Byung-yeon, an analyst at NH Investment & Securities Co.
Eyes are on the developments in China's real estate sector following the debt problems of its property giant Country Garden, which is feared to affect the country's already faltering economic recovery.
Investors were also worried about the Fed's policy path after minutes from its July meeting showed that officials saw a possible resurgence of inflation and the potential need for further rate hikes, though some were against further increases.
On the Seoul bourse, top-cap shares traded mixed.
Market bellwether Samsung Electronics fell 0.45 percent to 66,700 won, and chip giant SK hynix lost 0.86 percent to 114,800 won.
Major biotech firm Samsung Biologics went down 1.15 percent to 772,000 won, and LG Chem tumbled 2.18 percent to 584,000 won. Internet giant Naver tumbled 2.02 percent to 218,000 won.
But batteries and steel shares rose on bargain hunting.
Leading battery maker LG Energy Solution soared 2.65 percent to 540,000 won, and Samsung SDI advanced 1.16 percent to 608,000 won.
POSCO Holdings increased 1.28 percent to 553,000 won, and POSCO Future M soared 3.41 percent to 424,500 won.
Carmakers had mixed results. Top automaker Hyundai Motor skidded 0.54 percent to 184,800 won, while its affiliate Kia rose 0.51 percent to 78,400 won.
The local currency ended at 1,342 won against the U.S. dollar, down 5.1 won from the previous session's close.
Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasurys added 7.6 basis points to 3.788 percent, and the return on the benchmark five-year government bond rose 9.8 basis points to 3.865 percent.
Source: Yonhap News Agency